Throughout my career, I have assisted several clients to enter new markets of goods and services. While there are commercial risks to consider, for example Will the product be a hit? Will the margins make it worthwhile?
There are other factors to consider, such as: How do you manufacture the product? What are the risks involved in getting it to market?
A good way of minimising some of those risks is to partner (at least initially whilst you test the waters), with an experienced manufacturer. For example, Woolworth’s has recently launched a new range of underwear in partnership with established intimate appeal company, Bendon. The partnership means that an exclusive range of underwear under big brands such as Heidi Klum and Davenport will be stocked in Woolworth’s stores.
Not only can such partnerships minimise the risks of taking on all the supply chain tasks but, partnerships with other companies can be a great way to leverage off their goodwill and experience in the industry, particularly where you or your businesses’ expertise lays elsewhere.
Gain Consumer Confidence
Consumers are often more confident about shopping with brands they know and associate with quality products. Like Woolworth’s has done, having known-brands create an exclusive line for your business in collaboration with your own private label can save you manufacturing and marketing costs, whilst expanding your brand and improving your own brand identity.
In turn, you can provide new opportunities for the established brand in a new market or bring in new technologies and innovation.
Have a Contract
It is important to have a clear contract with the partner company. You will need to cover off things such as ownership of the brand, designs, quality, lead times etc. There are many ways to structure such an arrangement – from licensing agreements to manufacture and supply agreements. It is particularly important to clarify out exclusivity and intellectual property clauses up front. Working with another company does poses unique risks, particularly when it comes to cost-bearing and liability.
Ensure you have a clear idea of what you want and what you can offer in such a relationship, and have a qualified lawyer help you negotiate and draft your contract.
Get in touch
As a retail law specialist, I’ve worked with many businesses to negotiate, draft and review their contracts. If you need advice or assistance with your agreements, contact me at or call me at 1300 033 934 for a no-obligation quote.
Source: Insider Retail